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Escalation in Arab-Israeli crisis as airstrikes kill at least 20

CHRIS UHLMANN: It's been a bloody day in Gaza as Israel unleashed major airstrikes on the Palestinian territory; a retaliation, it says, for rocket attacks.

The bombings killed at least 12 Palestinians and wounded more than 80. Many are civilians.

Israel's attack even targeted homes and mosques because it says Hamas missiles were hidden in the buildings.

It's the most serious escalation of violence for two years, with no sign that either side is about to back down.

In the past few hours, Palestinian militants retaliated by firing missiles at Tel Aviv which were shot down by Israeli defences.

Middle East correspondent Hayden Cooper reports.

(Sound of bombs)

HAYDEN COOPER: The Israeli air raids went all day, striking in more than 100 places from north to south of the tiny Palestinian enclave.

(Sound of people and sirens)

This bomb left a mangled wreck of a car and four bodies, one a Hamas commander.

Another bomb delivered a lethal blow to a home further south. It reportedly killed seven Palestinians and wounded more than 20. Among those being rushed to hospital were children.

Israel says the homes it bombed were owned by Hamas militants and that this was necessary action to stop the rockets from Gaza.

Government spokesman Mark Regev:

MARK REGEV: Over the last few weeks, hundreds of such rockets have been fired. We have repeatedly warned Hamas that this must stop. And the Israel Defence Forces are currently acting to put an end to this once and for all.

Our goal is to free the people of Israel from the threat of these incoming rockets.

HAYDEN COOPER: As F-16s and Apache helicopters dropped bombs on Gaza, Israeli troops amassed at its border. The cabinet authorised the call-up of up to 40,000 extra army reservists, a warning that a ground invasion is an option.

Israel's military leaders also say this won't be a quick campaign. They'll take their time.

(Sound of Sami Abu Zuhri speaking)

Inside Gaza, Hamas has an equally defiant tone.

"We assure that the resistance is defending the Palestinian people", declared Hamas spokesman Sami Abu Zuhri. "The occupation threats and crimes will not break our will. We will continue to defend our people against these crimes."

(Sound of people protesting)

By day's end, the first funerals had begun in Gaza: frantic, angry scenes as Palestinians buried their dead and called for retribution.

(Sound of people shouting and crying)

Soon the retaliation arrived.

(Sound of air raid siren)

This is the sound of air raid sirens in Jerusalem, 80 kilometres from Gaza. Several long-range missiles were launched at the city and at Tel Aviv. Most were intercepted by Israel's anti-missile system.

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